The New Face of Pharma Marketing

Julie Davis
Marketing Health Services e-newsletter
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Key Takeaways
  •  As the Affordable Care Act changes incentives within health care, pharmaceutical marketers must now market their products to payers, or insurance companies, in addition to physicians and consumers.

  •  Pharma developers and manufacturers face more competition from generics as R&D breakthroughs have slowed down.

  • Marketers must better understand and communicate the science behind medications in order to demonstrate efficacy and develop patient support programs in order to demonstrate better value, two key points on competition in the pharma market.

Health care has endured a multitude of changes in the past year that have reshaped how the industry is approaching a former stalwart in health care marketing: pharmaceuticals. The Danbury, Conn.-based IMS Institute for Healthcare Informatics estimates that global spending on medicine will reach nearly 1.3 trillion by 2018—an almost 30% increase over 2013. Today’s pharma marketers, as a result, are adapting in the face of evolving market forces and government regulations to expand their target markets and provide value-added services to patients and providers.

Since the launch of the Affordable Care Act, health insurers and managed care companies are playing a bigger role in the pharma industry, which has widened the net for pharma marketers. Marketing toward so-called payers—insurance carriers and other third parties like employers or unions—is now a strong focus, says Zoe Dunn, co-founder and principal of Hale Advisors, a Kingston, N.Y.-based digital marketing and communications consultancy that specializes in health care and the pharmaceutical industry. “[Pharma marketing has] truly, up to this point, been physician- or provider-focused and consumer-focused. Payer marketing has always been important, but that is the avenue that is going to become more and more critical.”

Both 2012 and 2014 were blockbuster years for new drug approvals, with 39 and 41 new drug approvals, respectively—the highest since 1997, according to the FDA. Yet R&D in the industry started slowing down in the late ’90s, and as the patents for big-name pharmaceuticals began to expire, generic drugs claimed a larger section of the market share, according to Wes Wilkes, vice president at New York-based Interbrand Health. “What makes pharmaceuticals so different is that you have someone paying for it who needs economic and outcome evidence. You have somebody prescribing [medication] who needs clinical evidence, and you have someone who's taking it who doesn't want to buy it in the first place,” Wilkes says.

To help differentiate their products in a marketplace that’s increasingly crowded with generics, pharma marketers are expanding their offerings to include health-based services, such as educational materials and patient-support programs, as a value add for providers and patients. “[Physicians] may prescribe medication A over medication B because they know the program that the company is going to support medication A with. So they're actually prescribing a product based on the services that go with it, not necessarily because the patient asked for it,” Wilkes says.

However, building community and providing patient-support services is a continual challenge, according to Dunn. “It is very hard to promote your product and also appear honest and concerned and thoughtful about your patient’s condition. When you’re asking them to take your product and not someone else's product, it’s very hard to sound authentic in that communication.”

The changes in pharma marketing are similar to those within health care as a whole, says Paul Harney, the director of Monitor Deloitte​​​​, the strategy arm of New York-based research consultancy Deloitte. “You’re seeing retail pharmacies cross over into delivering care. You’re seeing some of the big plans and payers purchasing provider networks to deliver care. You’re seeing pharmaceutical companies develop offerings to support patients, and these offerings could include things like monitoring and tracking, and diaries for chronic diseases,” Harney says. “All of a sudden, the once-rigid lines between the sectors of health care, like payers, providers and manufacturers, are becoming very [blurred].”

 

This article was originally published in the January 2015 issue of the Marketing Health Services​ e-newsletter.​


Author Bio:

Julie Davis
Julie Davis is a staff writer for the AMA’s magazines and e-newsletters. She can be reached at jdavis@ama.org.
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